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Polygon’s native utility token, MATIC, is changing hands 17% below its all-time high perched a little over a week ago. The token suffered rejection on the climb towards $3.00 and is currently hovering around $2.40.
Dive in for more on the major events around Polygon over the last week and MATIC price analysis.
Polygon suffered a hack in December
Hacker walked away with $2M worth of MATIC before the latest upgrade
In a recently published blog post, secondary scaling solution Polygon revealed that a malicious actor stole MATIC tokens worth about $2 million last month. The hack happened earlier during the month, which the firm explained was the impetus for the hard fork on December 5th. The upgrade went live on Block #22156660, fixing the vulnerability that the hacker had exploited to steal a total of 801,601 MATIC tokens.
The network remained silent on the incident, not revealing news or details of the hack until just recently. The shared blog post detailed the turn of events between December 3rd and December 5th. The first white-hacker reportedly notified Immunefi, the Web3 platform hosting Polygon’s $2 million bounty program, of a potential loophole on December 3rd.
The possible exploit was investigated and confirmed by Immunefi before being forwarded to the Polygon team, which acted on it. A second white-hat pointed out the loophole the next day, and the network ran the ‘Emergency Bor Upgrade’ to fix the vulnerability but not before it had been exploited.
Fixing the critical vulnerability
The exploit was discovered in the Genesis contract. It is said to have put over 9.27 billion MATIC tokens (92.7% of the total supply) at risk as they were held in the Polygon smart contract where the loophole was identified. The hard fork, however, prevented more tokens from being stolen.
“The upgrade was executed on December 5th at block #22156660 without impacting liveness and performance of the network in any major way. The vulnerability was fixed and damage was mitigated, with there being no material harm to the protocol and its end-users,” a section of the post read.
Polygon noted that it took responsibility to compensate the affected victims through its foundation. The Polygon team rewarded the ethical hackers $3.46 million through its bug bounty program. One of the white hat hackers, Leon Spacewalker on GitHub and Twitter, received $2.2 million in stablecoins, while the other got nearly $1.26 million in MATIC tokens.
Though the update was made discreetly without any announcement to the public, there were still protestations. According to CoinDesk, several validators didn’t like the idea of running the major update to the mainnet silently and aired their complaints on the Polygon Discord server’s validator channel.
The media outlet further reported that logs showed that the upgrade took validators who were unaware and unprepared offline. Polygon’s core developers admitted that the decision put the Polygon community in a tough spot, noting “there is a natural tension between security and transparency.”
Polygon dumps C-level positions in its organization
The layer-two protocol Polygon no longer has C-suite positions in its hierarchical structure. Speaking to the Block, the protocol’s co-creator Mihailo Bjelic explained that the move was prompted by the need to maintain the decentralization of the project. Bjelic added that the team agreed to do away with the C-suite titles a while back.
He further noted that although the company didn’t have C-level positions anymore, the roles of the executives hadn’t changed. Sandeep Nailwal, a co-creator, and formerly the chief operations officer, removed the title from his profile on LinkedIn. Kanani, the other co-creator who doubles as the chief executive officer, also made the change to his LinkedIn profile last week. Fellow co-founder Anurag Arjun is, however, yet to update his profile to reflect the change.
Polygon (MATIC) market performance
Following a rally to $2.90 on December 27th, the price of MATIC token slid below $2.50 before rebounding to $2.65 on New Year’s Eve. The ascent lasted a short while, with the token shedding the gains and dropping to $2.45 on the same day. MATIC/USD remained between $2.50 and $2.55 until yesterday, when the pair briefly sunk below $2.43 and later $2.36.
MATIC has since slightly rebounded after bottoming at the week-low of $2.36 but is still struggling to gain ground. The token is down 5.14% in the last 7-days. The trading volume over the last 24 hours is up by 15% as of writing, as per data from coinmarketcap. The outlook remains predominantly bearish in the short term. That said, MATIC will have room to retest resistance at $3.00 and potentially surge towards $3.2o if it manages to convert the $2.54 level into support.
To learn more about this token visit our Investing in Polygon guide.